FAQs

Addressing topics that you may be thinking about

Frequently Asked Questions on Credit Reports

Q: Why are credit reporting agencies like Experian so important?

A: Credit data powers lending, commerce and our economy
and enables consumers to have access to reasonably priced credit to get the things
they need to live a productive life. Experian is the largest of the three national
credit reporting agencies (CRAs). We provide detailed information that enables creditors
to extend credit to consumers by verifying and validating a consumer’s credit
history. We are one element of the lending institution’s decision making process
which primarily involves supplying an individual’s credit history and applying
credit scoring models to calculate credit scores. Rather than relying on a storeowner
or a bank’s personal judgment and the biases that could accompany it, credit
reporting agencies ensure transparency and objectivity in the credit system. A credit
report does not only affect what credit someone can access but also how much they
pay for it, as lenders link the lending terms such as interest rates and fees to the
risk that a person will not repay the debt. It means that a poor credit history can
result in more costly credit repayments.

Since credit reporting agencies like Experian are only one piece of the credit
equation, there are things consumers can do to improve their credit scores. Simple
things, such as making payments on time, keeping balances low on credit lines and
only applying for the credit that is needed can help improve the credit equation.
If an individual can remain vigilant in monitoring their credit and managing it well,
they can improve their credit scores.

Q: What is Experian’s role in credit reporting?

A: Experian has long been an advocate for helping consumers,
providing credit information as well as decision-making services and tools to help
educate them on the use and management of credit to improve their financial health.

As a company, Experian has created a culture of commitment in the way we work with
consumers, because they are the reason we are in business. The existence of the credit
bureaus helps fuel the economy and gives consumers access to the conveniences and
efficiencies they have come to expect.

Currently, Experian helps more than 220 million consumers acquire, build, and improve
credit by managing their credit histories. The information we maintain includes payment
history for credit cards, mortgages, auto loans, and with Experian, rental payment
history. We also maintain data on debt-related public records including bankruptcies,
tax liens, and civil judgments, accounts that have been placed in collection and the
number of credit inquiries into a consumer’s credit report.

Q. Some have claimed that under the current system, consumer disputes are never seen
by anyone at Experian who can actually make an appropriate determination about the
validity of the dispute/problem. Is this true?

A: As it relates to Experian this is not true. This is not reflective of Experian’s process.

Resolving disputes is core to Experian’s mission: we are good at it and we
provide our employees with the right training and tools to get the job done. Moreover,
our agents are trained to be proactive when considering information submitted by consumers;
as needed, they include supporting information provided by the consumer with disputes.
Specifically, we utilize a specialized platform, created and maintained by our industry
and mandated by federal law, for our agents to communicate effectively with data furnishers
when processing disputes. Our experience is that most consumers are confident that
we have an effective dispute resolution process that allows them to correct errors
through multiple channels.

Q: Is it true that Experian doesn’t let its agents intervene on consumer disputes?

A: Experian has procedures where its consumer assistance
agents can and do question dispute responses directly with data furnishers. Our agents
are trained to be proactive when considering information submitted by consumers; they
do in fact have the ability to include supporting information provided by the consumer
with each dispute.

Q: How often are inaccuracies found on credit reports?

A: Of the more than 4-billion individual accounts we manage,
inaccuracies are rare. A recent study by the Consumer Financial Protection Bureau
(CFPB) found that between 1.3 and 3.9 percent of all consumers disputed information
on their credit reports (http://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-paper.pdf).
Additional research from the Policy and Economic Research Council (PERC) discovered
that less than one percent of the time, errors on their credit reports resulted in
a change to credit scores that would materially change eligibility for credit.

The Federal Trade Commission also states that consumer grievances about credit
reporting account for only two percent of the FTC’s total number of complaints.

Q: According to some interpretations, the recent FTC report on data accuracy indicates
that 10 percent of consumers have errors on their credit reports that would lower
an individual’s score. Is that true?

A: The main focus of the study was the frequency of material errors. What the study REALLY
says is that nearly 98 percent of reports are materially accurate; that is, only 2.2
percent of the credit reports in the study had errors that would materially impact
a credit score and change a consumer’s lending tier and credit pricing.

Q: Who is responsible for these inaccuracies?

A: We view it as a shared responsibility between consumers,
credit grantors who furnish the data, and credit reporting agencies, and each play
a vital role in providing accurate data through several parts of the process. For
example, credit bureaus and credit grantors must set quality standards for data reporting
and invest in systems, processes, and management tools to ensure that those standards
are consistently met. Consumers should do three simple things to help in this process:
first, consumers must provide correct and consistent information on credit applications
in order to lower the chances that incorrect identifying information is associated
with an account. Second, consumers should review their credit report frequently to
ensure that the information is accurate and complete. Ideally, the review should occur
prior to applying for credit. And third, consumers should review monthly billing statements
from their credit grantors to ensure accuracy of purchases and payment amounts.

Q: How is Experian helping to mitigate inaccuracies found in credit reports?

A: The integrity of data within our credit file is the cornerstone
of Experian’s business and our consumer relationships. Given the importance
of data accuracy, we invest the time and resources to ensure the credit files we maintain
are as accurate, fresh and secure as possible. Our state of the art consumer credit
database, File OneSM is the industry’s premier credit information
database; we employ almost 100 specialized professionals that focus on testing the
integrity of the data furnished to us and getting it loaded to our database quickly
so it is an accurate reflection of each consumer’s credit record. Another example
is that Experian is the only credit bureau to invest in and build its own data center
exclusive for Experian.

We have invested in businesses and processes that enable Experian to have the highest-quality,
freshest data for consumers. Experian has 13,000 data furnishers that provide updates
to Experian. We measure and monitor data from all contributors every month and conduct
an in-depth review of all of our major data contributors every 12-18 months. We also
conduct various data integrity processes to ensure data quality including utilizing
the National Change of Addresses (NCOA) catalog to ensure the best deliverable addresses
in the country. We maintain an inventory of more than 400 data quality rules that
are customized to the unique needs of clients, helping ensure the integrity of the
data we receive before the data is loaded on to our database.

Q: There have been claims that lenders are provided more information than what consumers
can see themselves. Is this correct?

A: No, this is NOT correct. In fact, consumers can view
and dispute all information on their credit report, some of which lenders may not
even see. This is why we recommend consumers visit annualcreditreport.com to secure
their Experian report each year.

Q: What can consumers do to improve the accuracy of their credit reports?

A: The first thing consumers can do to minimize the number
inaccuracies on their credit report is to be consistent and thorough when completing
credit applications. Double check that they are supplying correct information when
applying for a credit card or another type of credit, always use the same name or
nickname (ie: Robert Smith, Rob Smith, Bob Smith). Print neatly if you are completing
an application by hand to ensure the data entry person can read the information. If
you are completing an application online, review your entries to make sure they are
correct.

Review your credit report at least once a year. Experian strongly encourages consumers
to get their free annual credit reports, examine them for inaccuracies and dispute
any inaccuracies to the corresponding credit bureau. In an FTC study of consumer disputes
submitted to their offices, they found that 90% were resolved “as requested
by the consumer” by the credit bureaus prior to the Commission notifying the
credit bureau of the dispute. Experian’s website is designed to achieve an appropriate
and timely dispute resolution and, thanks to recent changes, more consumers are now
tracking their issues online. A recent study by the Policy and Economic Research Council
(PERC) found that nearly 72 percent of disputes are resolved within 14 days and 95
percent of consumers are satisfied with the outcomes.

Monitor your account billing statements each month. If you notice anything that
raises concern such as erroneous late payment notices, unrecognized charges or bills
for unrecognized creditors, you might review your credit report to make sure nothing
erroneous has been reported and to ensure there are no signs of fraud or identity
theft. If you should find any errors or incorrect information on your report, you
should follow this step-by-step process to get the information corrected.

To improve your credit scores, you must improve your overall creditworthiness by
changing your credit behavior over time. Time is a critical factor because credit
scoring systems consider behavior over time, not just the current payment status of
accounts.

Q: How long does it take to have an inaccuracy corrected on a credit report and what
is Experian doing to improve this process?

A: According to a recent industry study from Policy and
Economic Research Council (PERC), consumers are materially affected by an inaccuracy
less than one half of one percent of the time. Despite that statistic, we understand
how stressful it can be to find incorrect information on your credit report, especially
if the incorrect information is found while applying for credit. Our consumer assistance
agents make it a priority to have disputes resolved as quickly and as easily as possible.

To accommodate consumer preferences, we provide options on how consumers can initiate
a dispute — either online, by telephone or by mail. Most consumers chose to
utilize the online dispute system since it simplifies the process by providing choices
for the most common dispute reasons and provides a way to check the status of the
dispute during the process.

To better serve consumers and make sure they have the opportunity to ask questions,
help them better understand how inaccuracies occur and how the resolution process
works, our consumer assistance center established our “Stop the Clock”
program. This program improved our consumer assistance by changing the focus. Instead
of measuring the success of our customer service by the number of calls answered or
the speed which those calls were handled, our agents are empowered to provide excellent
customer service and spend time with each consumer to make sure their questions are
answered and they understand any next steps if needed.

Through our “Guided Path Resolution” initiative that started in 2008,
designed to innovate and improve interactions between consumers and our call center
operations, we’ve reduced customer effort and increase customer satisfaction
in a variety of ways:

For example, in 2010 we initiated routing improvements to our experian.com website,
which has made navigating our site much easier for consumers. We have also improved
consumers’ ability to track their issues online and simplified navigation of
the site.

Created a “credit report assistance” center at www.experian.com to
assist consumers in better navigating where they can dispute information online; obtain
their free annual credit disclosure; request an initial or extended fraud alert; request
a security freeze; and obtain additional information and advice about how to prevent
and/or recover from identity theft.

In 1996, the credit reporting industry implemented an online dispute resolution
system to drive greater accuracy and efficiency into the dispute resolution process.
As a result, consumer disputes are sent to data furnishers online daily rather than
relying on written documents sent by mail. Our online dispute resolution systems have been enhanced by numerous technology
improvements, such as our document upload service for online consumers which have
led to faster dispute resolution times which now average 14 days. This is less than
half the time allowed by federal law.

Q: How is Experian helping consumers learn about their credit reports and how to effectively
manage their credit?

A: Credit is not about just the amount of money we are able
to spend. It is also a frequent measurement of our financial trustworthiness and credibility.
That is why we make consumer education our top priority. As a company, we want to
ensure consumers have the knowledge and confidence to proactively manage, build and
improve their credit. In fact, Experian was the first credit reporting agency to initiate
an overall consumer education program more than 20 years ago. Whether by providing
accurate credit data or sharing analytic services and education tools, we are here
to help consumers improve their financial health by introducing extra consumer services
that go well beyond what’s required by the Fair Credit Reporting Act.

With that in mind, we created LiveCreditSmart.com to provide advice and resources
to assist consumers with all of life’s financial needs, from buying a home to
planning for retirement. At LiveCreditSmart.com, we also give access to the average
national credit scores and the results of our consumer credit research.

In addition, we are reaching out to consumers in a myriad of ways to help them
get “credit smart.” Our Experian Education Ambassadors program prepares
employee volunteers to conduct education programs for consumer groups and community
programs. Experian is the first in the industry to host live Facebook and Twitter
chats, answering questions about credit scores and identity theft, and Experian was
a founding partner of the Jump$tart Coalition for Financial Literacy, pushing for
the inclusion of financial literacy education in our nation’s public schools.

Also, Experian is the only national credit reporting company that the U.S. Department
of Defense invited to take part in its “Financial Readiness Tour” in 2009,
helping more than 8,000 U.S. military troops, families and retirees better understand
the consumer credit industry.

Q: What steps do consumers need to take to make corrections to their credit report?

Q: There have been allegations that all the credit reporting agencies are breaking
the law and are not in compliance with the Federal Fair Credit Reporting Act (FCRA).
Is that true?

A: This is false. The industry serves as part of the economic
backbone in the United States, and plays an important and effective role in the personal
finance world.

Experian is in full compliance with all relevant laws and regulations. And, from
an industry perspective, Federal courts have upheld our practices on multiple occasions.
Further, Congress directed the Federal Trade Commission to conduct a year-long review
of the dispute process and they did not find any violations of law.

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Experian seems to really take consumer information to heart–
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